A court ordered Odessa to pay a tenant over a million for repairs to the premises

The Supreme Court upheld the ruling ordering the Odesa City Council to pay more than 1.1 million hryvnias to the tenant of the premises at 8 Derybasivska Street. The funds are intended to compensate for the costs of the repairs carried out.

This is stated in the Supreme Court’s ruling. 

The court noted that, under the law, a tenant is entitled to reimbursement for the costs of non-removable improvements made with the landlord’s consent, up to the amount by which the property’s value has increased, unless the lease agreement provides otherwise.

The Supreme Court agreed with the lower courts that, under these circumstances, the Department of Municipal Property of the Odesa City Council is responsible for compensating for the improvements. It is the body that operates in both the leasing and privatization sectors and received funds from the buyer. In the court’s view, requiring the new owner to make the payment would constitute an undue burden, since it was the Department itself that benefited from the sale of the renovated property. 

In May 2019, the Department leased the first and second floors, totaling 345.6 square meters, to VKO LLC. Subsequently, the lease agreement was notarized and extended through 2050. With the Department’s approval, the tenant carried out major renovations on the premises, which experts deemed to be an integral improvement.

In December 2021, the premises were sold at auction for 10.25 million hryvnias to West Food Company LLC. The buyer agreed to maintain the lease agreement until 2050, but the terms of the sale did not provide for compensating the tenant for the cost of the improvements. The Department received the proceeds from the sale of the property, including the value of the renovations.
 

Юлія Калабайда